When you sell rental property, there is almost always two types of income generated.
Depreciation Recapture
Capital Gains
Start "Sale of Property/Depreciation"
-Yes for assets that can be depreciated
-Yes for improvements in 2022
-No for annual election. Is this right to get my improvements into my purchase price?
No, the rental and land needed to be entered when the rental was made available.
If improvements were made prior to the rental becoming available, that cost would be added to the cost of the building and become the basis for the rental.
If improvements were made AFTER the rental became available, the assets and Improvements would be entered as separate assets when they were placed into service.
Everything starts depreciation when placed in service.
Adding asset for improvement
-Add Asset -> Rental Real Estate Property -> Appliances, carpet, furniture -> Appliance Replacement, 45000, date purchsed in 2022 -> Checked I purchased this asset, checked "The Item was sold...", YES 100% of time for business. -> take full deduction this year.
No, you don't take full deductions for rental assets, it isn't allowed and it wouldn't do you any good regardless since Rentals are passive and you would not be allowed the deduction. Perhaps this is the "Missing 45,000" that is inflating your capital gain.
If you added the assets as separate items, and it seems you did, be sure to allocate part of the selling proceeds to those assets to get them off the books.
45,000 worth of appliances purchased just prior to the sale would get close to 45,000 of the sale, so that leaves 455,000 for the land and building.
That leaves 5,000 Capital Gains. This would be adjusted down for the expense of the sale.
Since you sold for as much or more than what you purchased the property for, all depreciation needs to be recaptured, (whether you took the depreciation of not)
You say there was 19,000, so you would have 19,000 Depreciation Recapture which is Ordinary Income. (as well as any depreciation on the appliances, which should be minimal.)
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